Category: Stock Market

The Altium Limited (ASX: ALU) share price is trading higher today – up 0.26% at the time of writing to $34.96 a share.

Although Altium is trailing the performance of the broader S&P/ASX 200 Index (ASX: XJO) today (which is up over 2%), it’s still been a fantastic few weeks to hold Altium shares. Remember, this is a company that was asking almost $23 just eight weeks ago – meaning an investor that bought in then would be sitting on a healthy gain of almost 50% today.

But is there still room for Altium shares to run?

Here’s why you might (or might not) want to throw $3,000 into Altium shares today.

Are Altium shares a good deal today?

Altium is one of the ASX’s most exciting tech stocks. It’s even part of the most-exclusive WAAAX club of tech market darlings that have captured investors’ attention over the past couple of years.

The company makes and markets software (creatively called Altium Design) that aims to assist electrical engineers with designing and producing printed circuit boards. It sells this software through the highly lucrative Software-as-a-Service (SaaS) model as well, which sets the company up very well for strong recurring revenue streams.

Printed circuit boards (PCBs) are an essential component of every mildly complex modern electronic device you can think of. Everything from smartphones and TVs to refrigerators and cars are full of PCBs and each one requires a different and unique design. The future possibilities are truly endless, in my view.

Altium has found a brilliant way to exploit this niche with its Design software, which has proved remarkably popular in its field. Altium has long had a goal of hitting 100,000 subscribers by 2025 (for its software, not its YouTube channel), which it looks well on the way to achieving.

But one of the best things about Altium shares in 2020? Its management doesn’t see too much of an impact on its core business from the outbreak of the coronavirus, and subsequent economic shutdowns. In a recent ASX release, the company’s CEO stated:

“At an industry level, electronic design is holding up relatively well in the new environment as engineers use excess time and capacity from the slowdown in manufacturing and supply chain to revert back to prototype designs.”

Although Altium did withdraw its 2020 guidance at the same time, I think the move was more precautionary that foreboding, judging by the above statement.

Foolish takeaway

Altium is a high-growth company that I believe has a bright future ahead of it. It’s a company sitting in a powerful tailwind that should last well into the decade and beyond.

On current prices, I think Altium is a little expensive (with a price-to-earnings ratio of 56.5). But, if you’re a true believer in Altium and have a long time horizon, it still has the potential to be a good investment today, in my view.

More reading

• The ASX big bank stock most likely to outperform in the COVID-19 recovery
• Cochlear share price edges lower on patent infringement news
• 3 ASX shares to instantly diversify your portfolio
• Are ASX 200 travel shares in the buy zone?
• Is the Bega Cheese share price a strong ASX buy today?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Should you throw $3,000 into Altium shares today? appeared first on Motley Fool Australia.

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So far, Australia’s ability to effectively combat the spread of coronavirus, minimise the impact on our healthcare system and begin rolling back social distancing measures has given the market cause for optimism. This is all great news and gives the Australian economy the best possible chance of rebounding from the crisis as quickly as possible. However, there is still a fair amount of uncertainty on the horizon. The underlying financial impact the coronavirus crisis has had on many companies may not be fully known until they start reporting their results in a few months’ time.

Given all this, it could be a good idea to start fortifying your portfolio with some solid defensive companies, including ASX 200 healthcare shares.

ASX 200 healthcare shares I’d buy today

Healthcare shares tend to perform well even in a crisis, as demand for their products remains robust. And in a healthcare crisis such as the one we are facing, many of these companies see demand for their products surge. Here are 3 companies I believe will deliver strong FY20 results and could insure your portfolio against potential market volatility later this year.

Sonic Healthcare Limited (ASX: SHL)

As a global healthcare company specialising in laboratory medicine, including diagnostics and pathology, Sonic Healthcare has been heavily involved in the international fight against coronavirus. It operates in many of the regions hit hardest by COVID-19, including the USA, Germany, the UK and Belgium.

The company officially withdrew its FY20 earnings guidance in late March, citing the uncertain economic conditions caused by the coronavirus across many of its markets. However, in the same update, the company noted that so far this year it has been performing in line with its previously issued guidance. It also acknowledged the frontline role it was playing to combat the pandemic. This includes by testing thousands of patients for COVID-19 as well as continuing to increase its testing capacity in many markets.

Sonic’s share price has rallied strongly since plunging to a 52-week low of $20.06 in late March. Currently trading at a little over $27, however, it is still well short of its pre-coronavirus high of $32.07.

ResMed Inc (ASX: RMD)

The share price of ASX 200 healthcare company ResMed was also savaged during the mid-March panic-selling spree. However, after plunging below $20 for the first time since October last year, the ResMed share price rebounded just as quickly. It is currently still up over 15% for 2020 and within touching distance of the 52-week high of $26.66 it recorded prior to the crash.

Based out of San Diego, ResMed specialises in the development of medical devices for the treatment of respiratory illnesses. It ramped up production of its ventilators threefold in the March quarter in order to help treat the mass influx of patients suffering with COVID-19. The company has won contracts with both the US and Australian governments to supply thousands of ventilators.

In its March quarterly update, ResMed reported revenue growth of 16% over the prior year’s comparative period to US $770 million, while net operating profit was up by 39%.

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

Like ResMed, Fisher & Paykel Healthcare specialises in medical devices for the treatment of acute respiratory conditions. However, unlike ResMed, the company does not produce ventilators. Instead, it manufactures other equipment, including humidifiers, which are still required for the treatment of COVID-19 patients. Like ResMed, Fisher & Paykel has ramped up production in order to meet the increased demand brought about by the pandemic.

Fisher & Paykel’s share price has been largely unaffected by the coronavirus pandemic. While most other share prices were plummeting in March, the company’s shares raced to a 52-week high of $31.47. Investors were buoyed by the fact that, in the midst of all the panic-selling, the company upgraded its full year operating revenue guidance to NZ$1.24 billion. Fisher & Paykel also advised its net profit after tax is expected to be in the range of NZ$275 million to NZ$280 million.

More reading

• Why Fisher & Paykel Healthcare, Mesoblast, Northern Star, & TechnologyOne are tumbling lower
• I would reinvest my Macquarie dividends in these top ASX shares
• 3 ASX healthcare shares to buy for strong long-term growth
• The next ASX sector in a post COVID-19 earnings upgrade cycle
• How can the ASX 200 soar with rising unemployment?

Motley Fool contributor Rhys Brock has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. and Sonic Healthcare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 3 ASX 200 healthcare shares I’d buy today appeared first on Motley Fool Australia.

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I’ve been looking at initial public offerings (IPOs) recently to see how you would have fared if you invested in them.

The last one I looked at was Altium Limited (ASX: ALU), which has rewarded its IPO investors handsomely over the last couple of decades. This is even after a few major hiccups over the years.

Today I thought I would take a look at private hospital operator Ramsay Health Care Limited (ASX: RHC).

Ramsay Health Care.

Ramsay Health Care came into existence in 1964 when founder Paul Ramsay purchased a guesthouse on Sydney’s North Shore called Warrina House and converted it into a psychiatric hospital.

Over the next decade and a half the company expanded its psychiatric hospital business before diversifying into medical and surgical businesses. In 1978 the company built its first surgical hospital – the Baringa Private Hospital in Coffs Harbour.

Fast forward to today and Ramsay is one of the largest healthcare companies in the world with a total of 480 facilities across 11 countries.

The Ramsay IPO.

In September 1997 Ramsay Health Care floated on the Australian Stock Exchange.

Details of the IPO are surprisingly limited, but according to Yahoo Finance, Ramsay’s shares were trading at an adjusted price of $1.15 on September 30 1997.

This means that $10,000 invested into Ramsay’s shares on that date would have yielded you 8,696 shares.

This afternoon Ramsay’s shares are changing hands at $67.22. Which means those 8,696 shares have a market value of almost $585,000 today.

In addition to this, although Ramsay has deferred its dividend for FY 2020 due to the pandemic, in time I expect its dividend to return to normal and then begin its growth trajectory again.

This will be good news to long term investors, because in FY 2019 the company paid dividends of $3.30 per share.

This means those 8,696 shares generated total dividends of $28,700 in FY 2019. Not bad for a $10,000 investment back in 1997!

More reading

• ASX 200 climbs 1% in positive start to the week
• Why the Ramsay share price is climbing
• How to invest $5,000 in ASX 200 healthcare shares today
• 5 ASX 200 winners and 5 losers of the week
• These small cap ASX shares could be stars of the future

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post If you invested $10,000 in the Ramsay Health Care IPO, this is how much you’d have now appeared first on Motley Fool Australia.

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The Cochlear Limited (ASX: COH) share price is edging lower today as the company announced it has been denied an appeal rehearing in its US patent infringement case.

While the S&P/ASX 200 Index (ASX: XJO) is currently storming 1.92% higher on the back of COVID-19 vaccine news, the Cochlear share price is down 2.54% for the day at $184.21.

Previous developments

This morning’s announcement relates to Cochlear’s ongoing court battle with Alfred E. Mann Foundation for Scientific Research (AMF) and Advanced Bionics (AB).

In November 2018, the US District Court in Los Angeles ruled against Cochlear and awarded damages totalling approximately US$268.1 million to AMF and AB. The company appealed this decision soon after.

Prior to this, the case had been dragging on for years. Back in 2014, a jury found that a group of Cochlear’s implants, sound processors, and software infringed 2 of AMF’s patents. Since then, there have been numerous rulings in favour and against Cochlear.

The result of the appeal of the November 2018 decision was finally handed down in March this year, with the US Court of Appeals for the Federal Circuit in Washington D.C. affirming the previous decision. As such, the court ordered the Cochlear to pay the US$268 million of damages to AMF and AB.

At the time of the announcement, the company stated in an ASX release it would “seek an en banc review by the full Court of Appeals in a petition for a rehearing”.

What did Cochlear announce today?

This morning, the company revealed that the US Court of Appeals had denied its petition for a rehearing of the appeal.

The judgement will become final on 26 May 2020 and Cochlear will now pay approximately US$280 million, which includes post-judgment interest. The company noted that it has committed loan facilities available to fund the payment.

Meanwhile, a decision is still pending in the US District Court on AMF and AB’s application for pre-judgment interest of US$123 million and attorney fees of $15 million. Cochlear has opposed both applications and the associated calculation methodology for the amounts.

As there is significant uncertainty over whether Cochlear will be forced to make these payments, the company is treating this exposure as a contingent liability on its balance sheet.

More reading

• The ASX big bank stock most likely to outperform in the COVID-19 recovery
• Should you throw $3,000 into Altium shares today?
• 3 ASX shares to instantly diversify your portfolio
• Are ASX 200 travel shares in the buy zone?
• Is the Bega Cheese share price a strong ASX buy today?

Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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One investment thematic that I’m excited about is the cloud computing boom.

The global public cloud services market is expected to grow materially over the next decade as more infrastructure migrates to the cloud.

I believe this growth means that companies exposed to the cloud computing market could be positioned perfectly to profit.

Two shares which I expect to benefit greatly from this boom are listed below:

Megaport Ltd (ASX: MP1)

Megaport could be a great way to play this thematic. It is a leading provider of elasticity connectivity and network services through a growing number of data centres globally. Its network as a service offering allows customers to increase and decrease their available bandwidth in response to their own demand requirements. This basically means that customers can ramp up their bandwidth at busy times and reduce it when demand is low.

This is proving very popular with companies that don’t want to be locked into fixed service levels on long-term contracts. So much so, the company recently reported a 10% quarter on quarter increase in revenue to $15.2 million. This was driven by a 6% lift in customer numbers to 1,777 and a 12% jump in total services to 15,531. Also rising strongly was  Megaport’s monthly recurring revenue. It was up 19% quarter on quarter to $5.4 million at the end of March. Given the tailwinds it is experiencing, I believe it is well-placed for further strong growth over the coming years.

NEXTDC Ltd (ASX: NXT)

Another way to gain direct exposure to the cloud computing market is NEXTDC. It is an innovative data centre operator with world class centres in key locations across Australia. Thanks to the strong demand for data centre services, NEXTDC has been expanding its network at a solid rate over the last few years.

And with the cloud market expected to continue growing materially for many more years to come, demand for space in its centres looks set to maintain its upwards trajectory. Another positive is that the company has consistently been making its operations more efficient by generating greater revenue per square metre and megawatt over the last few years. I’m confident there will be more of the same in the coming years, which should drive strong earnings growth as it scales.

More reading

• These ASX 200 shares are up over 40% in 2020
• Why I would buy these exciting ASX growth shares right now
• Why a buy and hold strategy for ASX shares is best
• Should you invest in super or your ASX share portfolio?
• The smartest ASX shares to buy if you have $2,000

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post These ASX tech shares could be destined for big things thanks to cloud computing appeared first on Motley Fool Australia.

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The coronavirus crash the ASX has gone through in 2020 has, so far, proved many things. But one of the most pertinent (in my view) is the importance of having a diversified and risk-adjusted portfolio.

A portfolio of ASX shares is always open to attack from so-called ‘black swan’ events; occurrences (like the coronavirus) which no-one can predict or plan for. For example, having a portfolio with large exposure to travel-related shares might not have raised too many eyebrows in 2019. But in 2020? It’s a different story.

So here are 3 ASX shares that I think anyone can add to their portfolio and instantly see increased diversification and a debasing of concentrated risk.

MFF Capital Investments Ltd (ASX: MFF)

MFF Capital is a Listed Investment Company (LIC) that holds a portfolio of predominantly US-based shares. Some of these include MasterCard, Visa, Home Depot, Wells Fargo, and Microsoft, but overall MFF holds around 20 companies.

Just by buying shares of MFF, you are getting exposure to this diversified portfolio of US shares – something that will instantly increase your own portfolio’s diversification. Most ASX share portfolios are underweight in US and international shares as well, so this company is an easy way to increase your geographical exposure.

Washington H. Soul Pattinson & Co Ltd (ASX: SOL)

‘Soul Patts’ is one of the best shares on the ASX in my view. The company is very old, having listed on the (then) Sydney Stock Exchange back in 1903 as a chemist. Today, Soul Patts has well and truly branched out from pharmacies and now owns significant chunks of a variety of quality ASX businesses. These include TPG Telecom Ltd (ASX: TPM), Brickworks Ltd (ASX: BKW), BKI Investment Company Ltd (ASX: BKI), and New Hope Corporation Ltd (ASX: NHC).

Thus, I think Soul Patts is a great company to hold for broad exposure to the Australian economy. It might also be a strong alternative to an S&P/ASX 200 Index (ASX: XJO)-based ETF for any investor not keen on heavy exposure to ASX banks and miners.

iShares Global 100 ETF (ASX: IOO)

This ETF holds nothing more or less than the 100 largest companies within the advanced economies of the world. It’s dominated by US shares like Apple, Alphabet, and Amazon, but also has companies like Toyota, Nestle, and Samsung to spice things up.

All of the companies in iShares Global have got to where they are today by being highly successful in their fields. Whilst large companies do fail, I still think that size gives a lot of safety, especially in these uncertain times. As a result, I don’t think any investor can go wrong by including this ETF in a well-balanced portfolio.

More reading

• Are ASX 200 travel shares in the buy zone?
• Is the Bega Cheese share price a strong ASX buy today?
• ASX 200 storms 2% higher: Big four banks jump on COVID-19 vaccine news
• This ASX 200 tech share is sinking 5% lower after its half year update
• 3 ASX 200 dividend shares I’d buy today

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Magellan Flagship Fund Ltd, Mastercard, Visa, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Mastercard, Microsoft, and Visa and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Mastercard. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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